According to a survey conducted by ClosingCorp, over half of all homebuyers are surprised by the closing costs required to obtain their mortgage.

After surveying 1,000 first-time and repeat homebuyers, the results revealed that 17% of homebuyers were surprised that closing costs were required at all, while another 35% were stunned by how much higher the fees were than expected.

“Homebuyers reported being most surprised by mortgage insurance, followed by bank fees and points, taxes, title insurance and appraisal fees.”

Bankrate.comgathered closing cost data from lenders in every state and Washington, D.C. in order to share the average costs in each state. The map below was created using the closing costs on a $200,000 mortgage with a 20% down payment.

Keep in mind that if you are in the market for a home above this price range, your costs could be significantly greater. According to Freddie Mac,

“Closing costs are typically between 2 and 5% of your purchase price.”

Bottom Line

Speak with your lender and agent early and often to determine how much you’ll be responsible for at closing. Finding out that you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.

]]>How to Get the Most Money from the Sale of Your Homehttp://www.collinsmortgageteam.com/how-to-get-the-most-money-from-the-sale-of-your-home/
Mon, 25 Sep 2017 11:08:05 +0000http://www.collinsmortgageteam.com/how-to-get-the-most-money-from-the-sale-of-your-home/

Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive maximum value for your house? Here are two keys to ensure that you get the highest price possible.

1. Price it a LITTLE LOW

This may seem counterintuitive. However, let’s look at this concept for a moment. Many homeowners think that pricing their home a little OVER market value will leave them room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price, but will instead have multiple buyers fighting with each other over the house.

Realtor.com gives this advice:

“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

2. Use a Real Estate Professional

This, too, may seem counterintuitive. The seller may think they would make more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.

A new study by Collateral Analytics, reveals that FSBOs don’t actually save any money, and in some cases may be costing themselves more, by not listing with an agent.

In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:

“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.”

The results of the study showed that the differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%. Sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.

Bottom Line

Price your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the price you get for your house.

Some Highlights:

Homes are selling quickly with 51% of homes on the market for less than a month.

A limited supply continues to drive up prices for the 66th consecutive month.

]]>Why Are So Few Homes for Sale?http://www.collinsmortgageteam.com/why-are-so-few-homes-for-sale/
Thu, 21 Sep 2017 11:10:57 +0000http://www.collinsmortgageteam.com/why-are-so-few-homes-for-sale/

There is no doubt that the largest challenge in today’s housing market is a lack of housing inventory for sale. This challenge has been defined as an “overwhelming lack of supply,” and even a “straight up inventory crisis.”

First American just released the results of a survey which sheds light on the reasons for the current lack of supply.

The survey asked title agents and real estate professionals to identify what they believe are the top reasons for this lack of inventory in their markets. Here are the results of the survey:

47% – existing homeowners are worried that they will not be able to find a home to buy

5% – first-time buyer demand is absorbing a large share of available homes

3% – existing homeowners’ mortgage rates are lower than the current rates

6% – insufficient or negative equity in the home

6% – foreign buyer demand is absorbing a large share of available homes

As the survey revealed, there is a shortage of current homeowners willing to put their homes on the market for one of three reasons (see numbers 1, 3 and 4 above).

Is this an opportunity for some homeowners?

The report on the survey explains:

“The crowd has spoken, and it seems in many markets home buyers and sellers alike are ‘imprisoned’ by the lack of housing inventory.”

That leaves a tremendous opportunity for every homeowner not facing these concerns. If you can put your home on the market today, you are subject to far less competition than at any time in recent history. That will result in your home selling quickly and for the highest possible price.

Bottom Line

While many homeowners are feeling imprisoned for multiple reasons, those who are not handcuffed by these concerns have a once in a lifetime opportunity to sell their houses at a peak selling time.

]]>More Americans Say Now is a Good Time to Sell!http://www.collinsmortgageteam.com/more-americans-say-now-is-a-good-time-to-sell/
Wed, 20 Sep 2017 11:07:37 +0000http://www.collinsmortgageteam.com/more-americans-say-now-is-a-good-time-to-sell/

Recently released data from Fannie Mae’s National Housing Survey revealed that rising home prices were the catalyst behind an eight-point jump in the net percentage of respondents who say now is a good time to sell. The index is now 21 points higher than it was this time last year.

Overall, 62% of Americans surveyed said that now is a good time to sell (up from 58%), while 26% of respondents said that now is not a good time to sell (down from 30%). The net score is the difference between the two percentages, or 36%.

According to CoreLogic, home prices are now up 6.7% over last year and 78.8% of homeowners with a mortgage in the US now have significant equity (defined as 20% or more).

As home prices have increased, more and more homeowners have realized that now is a good time to sell their homes in order to take advantage of the extra equity they now have.

At the same time, however, rising prices have had the exact opposite impact on the good-time-to-buy scale as many buyers are nervous that they will not be able to afford a home; the net score dropped 5 points to 18%.

Doug Duncan, Vice President & Chief Economist atFannie Mae, had this to say,

“In the early stages of the economic expansion, home selling sentiment trailed home buying sentiment by a significant margin. The reverse is true today.

The net good time to sell share is now double the net good time to buy share, with record high percentages of consumers citing home prices as the primary reason for both perceptions.Such a sizable gap between selling and buying sentiment, if it persists, could weigh on the housing market through the rest of the year.”

Buyer demand continues to outpace the supply of homes for sale, which has driven prices up across the country. Until the supply starts to better match demand, there will be a gap between the sentiments surrounding buying and selling.

Bottom Line

If you are considering listing your home for sale this year, now is the time!

Freddie Mac, Fannie Mae, andThe Mortgage Bankers Association are all projecting that home sales will increase in 2018. Here is a chart showing what each entity is projecting in sales for the remainder of this year and the next.

As we can see, each entity is projecting sizable increases in home sales next year. If you have considered selling your house recently, now may be the time to put it on the market.

There’s a reason housing professionals and economists keep a watchful eye on the nation’s home equity levels. Not only can home equity help families and individuals build their wealth, it can provide valuable access to resources for a variety of businesses and industries.

According to a recent press release from the National Association of Home Builders (NAHB), equity in a home was used as a source of capital to start more than 284,000 businesses (248,618 to be exact). That represents 7.3 percent of all businesses nationwide. This information originally came from recently published data from a new survey developed by the U.S. Census Bureau.

The new survey is the Annual Survey of Entrepreneurs (ASE), which collects economic and demographic information on businesses and business ownership in all major U.S. industries, according to the NAHB. The ASE gathers pertinent data on a yearly basis for three years beginning with 2014.

The 2014 ASE shows that the use of home equity as start-up capital across all industries at 7.3 percent. The survey also showed that there are six North American Industry Classification System (NAICS) industries that use home equity at higher rates, notably Accommodation and Food Services, Other Services, Retail Trade and Manufacturing. NAHB contributor Benjamin Whetzel writes, “These industries similarly experience lower rates of profitability, are often not home-based businesses, and on average assemble $50,000 to $99,999 worth of funding as start-up capital.”

In addition to measuring the use of home equity as start-up capital by industry, the ASE also looks at the demographics of company owners. According to the results of the 2014 ASE, businesses owned by women are more likely to use home equity as a source of start-up capital at 7.8 percent, compared to only 6.6 percent of businesses owned by men. Companies with equal male- and female-ownership use home equity in 10.8 percent of cases.

When looking at race, the ASE found that white business owners relied on home equity less than any other races measured at 7.3 percent. Black or African American owners used home equity in 7.8 percent of cases, Asians in 9.0 percent, American Indian and Alaskan Native at 9.1 percent, and Pacific Islander or Hawaiian in 10.0 percent.

What the ASE can teach us is that home equity not only plays a large role in contributing to U.S. business capital overall, but it is particularly important in helping women and racial minorities in the U.S. start new businesses. This further exemplifies the significance of home equity, and homeownership in general.

Options for Using Home Equity

If you’re considering tapping into your home’s equity, there are a variety of ways to do so. Here are a few examples.

Cash Out Refinancing– Refinance your home for more than what you owe and receive the difference in cash.

Home Equity Line of Credit (HELOC) – Tap into your home’s equity as needed with a line of credit, similar to a credit card. Interest rates are usually variable.

Home Equity Loan – Similar to a HELOC but typically carries a fixed interest rate and you receive the money in a lump sum.

Reverse Mortgage (for homeowners 62 or older) – Instead of you making payments, the lender pays you. Receive the loan proceeds in the form of a lump sum, monthly payments or a line of credit (or a combination of these). Note – not all mortgage lenders offer reverse mortgages.

Want to discuss some other options with a qualified mortgage professional? Give us a call at (866) 544-7013 to review financing information and get a free, no-obligation rate quote.

Some Highlights:

“The majority of millennials said they consider owning a home more sensible than renting for both financial and lifestyle reasons — including control of living space, flexibility in future decisions, privacy and security, and living in a nice home.”

The top reason millennials choose to buy is to have control over their living space, at 93%.

Many millennials who rent a home or apartment prior to buying their own homes dream of the day that they will be able to paint the walls whatever color they’d like, or renovate an outdated part of their living space.

]]>Report: Homeownership Is a Precondition of the American Dreamhttp://www.collinsmortgageteam.com/report-homeownership-is-a-precondition-of-the-american-dream/
Thu, 14 Sep 2017 11:08:12 +0000http://www.collinsmortgageteam.com/report-homeownership-is-a-precondition-of-the-american-dream/

Hearth just released their 2017 State of the American Dream report which showed that Americans still see homeownership as an integral piece of the American Dream. The report confirmed that “all generations–including millennials–agree homeownership is very important to achieving the American Dream.”

Americans ranked “owning a home I love” higher than any other options (including “starting a family” and “finding a fulfilling career”) as an important part of the American Dream.

Despite some claims that homeownership’s importance to the American Dream is in decline, the report found that the dream of homeownership remains strong.

Of Americans who said they think achieving the American Dream is important, 70% think homeownership is important to the dream, and 41% think homeownership is very important to the dream.

What about Millennials?

Hearth addresses the desires of millennials by explaining:

“Contrary to popular opinion, millennials who want to achieve the American Dream are 5% more likely than Baby Boomers to think homeownership is important. And two-thirds of millennial renters view homeownership as important to the American Dream.

Although millennials are often portrayed as fickle and transient, they actually seek the stability of homeownership even more than their parents.”

Other Key Findings from the Report:

Homeowners are 126% more likely than non-homeowners to view homeownership as a way to build wealth. Nevertheless, homeowners still overwhelmingly associated homeownership with a family living space.

Homeowners are 24% more likely than non-homeowners to see homeownership as an achievement that reflects hard work.

Millennials are 77% more likely than baby boomers to see a home primarily as a way to build wealth.

Baby boomers are 98% more likely than millennials to see a home as a way to pass wealth down to children or family.

Millennials are 29% more likely than baby boomers to see a home as an achievement that reflects hard work–an outcome we expected given that many millennials are still working hard to afford their first homes.

Bottom Line

The report concluded:

“This survey revealed a powerful finding: Across demographic groups, homeownership remains a precondition of the American Dream.”

IRVINE, CA–(Marketwired – September 12, 2017) – LoanScorecard™, a leading provider of loan pricing solutions, automated underwriting and compliance solutions, announced today that Mid America Mortgage eCorrespondent has implemented Portfolio Producer™ as its product and pricing engine and distribution solution.

Mid America Mortgage, Inc. Correspondent is the correspondent lending division of Mid America Mortgage, a multi-state, full-service mortgage lender with 26 branches in the United States. The eCorrespondent division offers a wide range of purchase and refinance programs including low down payment and expanded credit options.

Portfolio Producer allows Mid America Mortgage, Inc. Correspondent to instantly distribute their own rates and pricing to third-party originators (TPOs) via their loan origination system, Calyx Point®, and on the web via a unique URL. TPOs can search based on borrower profile, product type, rate and price to provide eligible products and pricing options to potential borrowers — increasing efficiency and decreasing the likelihood that the TPO will quote the wrong information to the borrower.

“The National Association of Realtors has been urging its members to embrace e-closings and, as everyone in this industry knows, maintaining mutually beneficial relationships with realtors is essential to an originator’s success,” said Kara C. Lamphere, Chief Operating Officer at Mid America Mortgage. “That’s why Mid America has developed and implemented an end-to-end e-mortgage strategy and LoanScorecard’s Portfolio Producer is a key part of that strategy. It allows us to broaden our TPO reach with minimal effort through a digital platform. In addition, our integration with Portfolio Producer has been seamless from implementation to everyday use.”

“Forward-thinking lenders like Mid America know e-mortgages are the future of our industry and require technology that not only enables e-closings, but also product and pricing at the point of sale,” said Ben Wu, Executive Director at LoanScorecard. “Portfolio Producer allows Mid America to eliminate cumbersome rate sheets and distribution list upkeep, and provide their rate and pricing information to TPOs digitally — which is key to having a successful digital mortgage operation.”

About LoanScorecard
LoanScorecard™ is a leading provider of automated underwriting and loan pricing solutions designed to meet today’s regulatory challenges and capitalize on market opportunities. The company’s Portfolio Underwriter™ can be tailored to capture a lender’s specific credit policy and render underwriting findings that demonstrate a consistent loan manufacturing process to auditors and investors. Portfolio Producer™ electronically distributes wholesale and investor products to third-party originators (TPOs), providing them with a real-time, interactive tool to determine borrower fit and risk-adjusted pricing for non-agency programs, and enabling them to submit qualified loans with confidence. Additionally, as the industry’s first QM engine, LoanScorecard helps institutions address CFPB regulations through its QM Findings™, the industry’s first qualified mortgage (QM) engine which has rendered more than 5 million QM findings reports to-date. For more information, visit loanscorecard.com or call 800-617-0892.